STATEMENTOF MICHAEL F. HERTZDEPUTY ASSISTANT ATTORNEY GENERALCIVIL DIVISIONBEFORE THECOMMITTEE ON THE BUDGETU.S. HOUSE OF REPRESENTATIVEENTITLED“BUDGET IMPLICATIONS OF CLOSING YUCCA MOUNTAIN”PRESENTED ONJULY 27, 2010

STATEMENT OF MICHAEL F. HERTZDEPUTY ASSISTANT ATTORNEY GENERAL, CIVIL DIVISIONU.S. DEPARTMENT OF JUSTICEBEFORE THE HOUSE BUDGET COMMITTEEJULY 27, 2010Mr. Chairman, and members of the Committee, I am Michael F. Hertz, and Iam a Deputy Assistant Attorney General of the Department of Justice, CivilDivision. I am pleased to testify today regarding the status of litigation concerningthe Department of Energy

s obligations under the Nuclear Waste Policy Act(“NWPA”) of 1982. I testified before the Committee in October 2007 and July2009 regarding the same subject, and this testimony updates and supplements thetestimony that I have previously provided.Let me note at the outset that much of the litigation about which you haveasked the Department of Justice to provide testimony is still pending in the Federalcourts. As a result, the Department’s pending matter policy applies to anydiscussion of those cases. Pursuant to that policy, I will be happy to discussmatters that are in the public record.Background In 1983, pursuant to the NWPA, the Department of Energy (“DOE”)entered into 76 standard contracts with entities, mostly commercial utilities, thatwere producing nuclear power. Through the standard contracts, DOE agreed thatby January 31, 1998, it would begin accepting spent nuclear fuel and high-level

2radioactive waste (collectively, “SNF”) created by the utilities. In return, theutilities agreed to make quarterly payments into the Nuclear Waste Fund (“NWF”)created by the statute. The utilities began making payments into the NWF in 1983.To date, DOE has not yet commenced accepting SNF. The commencement datefor SNF acceptance at a Federal facility is currently unknown; however, DOE hasclearly stated its continued commitment to meeting its obligations for disposing of spent nuclear fuel and high-level radioactive waste.Status Of Court Of Federal Claims LitigationIn response to DOE’s delay, utility companies have filed 72 cases in theUnited States Court of Federal Claims, alleging that DOE

s delay in beginningSNF acceptance constituted a breach of contract. The Court of Appeals for theFederal Circuit, in Maine Yankee Atomic Power Co. v. United States, 225 F.3d1336, 1341 (Fed. Cir. 2000), has ruled that the delay constitutes such a breach.The utilities’ damages claims are largely for the costs incurred to store SNFthat they allege DOE would have accepted from them absent the breach --specifically, storage costs that utilities allege they would not have expended hadDOE begun timely performance under the standard contracts. In addition, severalutilities have alleged damages arising from the “diminution-in-value” of theirplants as the result of DOE’s delay, claiming that they realized these damages